THE TRICHIRAPALLI POSTAL EMPLOYEES CO-OP CREDIT & THRIFT SOCIETY LIMITED,TRICHY vs. INCOME TAX OFFICER, CIRCLE 1(1) TRICHY, TRICHY

I humbly submit that the learned Commissioner of Income-tax (Appeals) erred in law and on facts in dismissing the appeal in limine solely on the ground of limitation, without adjudicating the grounds on merits, thereby violating the principles of natural justice and the mandate of section 250(6) of the Income-tax Act, 1961.

I humbly submit that the impugned orders, having been passed without proper appreciation of facts, without examination of the appellant's books of account, and without granting a reasonable opportunity to adduce evidences, are unsustainable in law and deserve to be set aside, with a direction to restore the matter for fresh adjudication on merits after affording due opportunity to the appellant.

I humbly submit that the addition under section 69A has been made purely on account of non- furnishing of explanations, without calling for or examining the appellant's cash book and other statutory records, and hence the matter deserves to be restored to the file of the learned CIT (A) with a direction to frame a proper hearing and grant an effective opportunity to the appellant to place evidences on record for a fair and just conclusion of the proceedings.

I humbly submit that the learned CIT(A) failed to appreciate that the appellant is a Primary Agricultural Co-operative Credit Society, registered under the Tamil Nadu Co-operative Societies Act, 1983, functioning under strict statutory supervision for the welfare of agriculturists and rural communities, and that the issues involved required adjudication on merits rather than rejection on technical grounds.

I humbly submit that the learned CIT(A) erred in rejecting the application for condonation of delay without appreciating that the delay occurred due to bona fide and unavoidable circumstances, as the person entrusted with tax compliance failed to bring statutory notices to the knowledge of the Society's management, whose members are not conversant with income-tax procedures.

I humbly submit that the learned CIT (A) failed to consider that during the relevant period the appellant maintained its books of account entirely in manual form, in accordance with cooperative practices prevalent during, FY 2015-16, and due to the absence of computerized systems, the appellant was genuinely prevented from furnishing records electronically during faceless proceedings.

1 humbly submit that throughout the assessment as well as appellate proceedings no response was furnished by the appellant, and consequently the case was disposed of entirely on the basis of material gathered by the department, without attaching due importance to the evidences maintained by the assessee, resulting in grave prejudice.

I humbly submit that the non-participation of the appellant during the assessment and appellate proceedings was due to bona fide and unavoidable causes beyond the control of the society, and not due to willful default or deliberate non-compliance, and therefore the ex-parte conclusions drawn without affording an opportunity of being heard are contrary to the principles of natural justice.

The brief facts of the case are that the assessee Cooperative Society has not filed any return of income but deposited cash of Rs. 10 lakhs or more in Saving Bank Account amounting to Rs. 1, 91, 20, 159/-. Based on the above information, a notice u/s. 148 of the Act was issued on 27.03.2023 in accordance with the amended provisions of section 148A of the Act. Still, the assessee has not filed any return of income in response to notice issued u/s. 148 of the Act. Ultimately, the case of the assessee was assessed ex-parte after making an addition of Rs. 5, 73, 51, 492/- and Rs. 7, 04, 697/- on account of unexplained deposits u/s. 69A of the Act and interest income respectively.

The assessee being aggrieved with the above preferred an appeal before the Ld. CIT (A) with a delay of 125 days. Again, the matter was not pursued by the assessee before the Ld. CIT (A) and delay in filing of appeal was also not explained to the satisfaction of the Ld. CIT (A), hence, he dismissed the appeal of the assessee and confirmed the order of the AO. The assessee being further aggrieved preferred an appeal before us in the present appeal along with application for stay of demand. It is observed that the appeal filed before us is also time barred by 130 days. As the matter pertains to a Cooperative Society, taking a lenient view and delay before us is condoned. Further, as the matter was never adjudicated on merits

In the result, the appeal of the assessee is allowed for statistical purposes and the Stay Application is dismissed with the above observations and direction.